Welcome to episode seventeen of the SaaS Backwards podcast, where we interview CEOs and CMOs of fast-growing SaaS firms to reveal what they are doing that's working, and lessons learned from things that didn't work as planned.
You can listen to the full episode directly below via Spotify, or visit SaaS Backwards on Buzzsprout or wherever you listen to podcasts.
The Dark Funnel and Moving Away from the Fakery of the MQL with Latané Conant CMO at 6Sense
Latané Conant, CMO, 6Sense
Edited for clarity and readability
Host, Ken Lempit:
Welcome to SaaS Backwards, a podcast that helps SaaS, CMOs, and CEOs to accelerate growth and enhance profitability. We take a look at what's working for growing SaaS companies, leadership decision making, and what did and didn't work, and why. Our guest today is Latané Conant, CMO of 6sense.
But before we dig into topics for the podcast, could you tell us a little bit about yourself and 6sense?
Hi, thanks for having me. I'm Latané Conant, Chief Market Officer at 6sense. I've been at 6sense as the CMO about three years now, and it’s been a pretty exciting journey.
Part of that was actually publishing a book that came out about a year ago called "No Forms. No Spam. No Cold Calls: The Next Generation of Sales and Marketing." (Get a free copy here)
6sense is a leading account-based marketing platform. What we do, essentially, is allow you to uncover your dark funnels.
If you think about all of the insights, all of the rich data that you can't get your hands on, because either buyers are researching anonymously, they're on your site or other sites, or maybe it's your own data, but you just don't have a good way to really mine that data and understand your buying journey.
We do that for you by providing rich insights into your buying journey, and then take action on those insights.
So we tell you, "Hey, this is the best channel to market through. These are the best ads to serve."
Let’s go off the script out of the gate here and talk about why you advocate CMOs calling it the Chief Market Officer.
Sure. One of the things I do is to facilitate a couple of different communities, and one of them is a group of the top B2B CMOs out there--all women--and we get together every year, we do a study and we talk about the state of marketing.
One of the sessions that we ran was "Is this Chief Marketing Officer role a black hole?"
Meaning it's hard to sometimes prove the value, when you think about yourself as a Chief Marketing Officer, cause the "-ing" represents activity, it represents likes, it represents clicks, it represents blog posts, it's all of the "-ing" that supports market.
And so we have this conversation and really started, what I think, is a little bit of a movement to say, "Well, how come every other title in the C-suite is about owning their function?"
It's about being the Chief Sales Officer, the Chief Finance Officer.
The Chief Finance Officer doesn't rock into the board meeting and talk about how we closed the books, or how many times they forecasted or re-forecasted.
I'm not saying a lot of CMOs do that.
I think as a function, we've come a long, long, long, long way, but there is still a ways to go, and I think if you start to think about yourself as owning the seat at the table, that represents the market and you start to, every single day, wake up with, "I am the Chief Market Officer. I own this market." All of a sudden the value of your function will tremendously grow.
Well, think about what it takes to have a successful company. Yes, you need a product. Yes, you need to be able to sell and service that product, but unless you have a market you don't have a company.
And so really elevating that role to say, "What does the market need? How do we position ourselves uniquely in this market? What's the feedback loop product to make sure we're building the right things that the market needs?" is absolutely critical.
And when I start to dissect company after company and their go-to market strategy, one of the quickest places that I look and I see companies have fallen down is around market, specifically, do they understand their ideal customer profile?
Target-addressable market is fun. It's fun to be able to say, "We can sell to 600,000 B2B companies!" But guess what? That doesn't mean we should, and that doesn't mean now is the right time.
And so really strategically thinking through not just your total addressable market, your total addressable in-market and within that, what is an ideal customer for you look like? What's the profile of them? Are they in-market?
That's highly strategic, but critical to a successful go-to market motion.
And that's one of the things that I think Chief Market Officers start to own and start to think about is really how do we call insights to be able to point our precious resources at the ideal customers for us?
That's a phenomenon we see a lot in our clients and prospects, this almost fast food orientation to marketing services. "I'll have three blog posts and an ebook, please."
It just devalues the function to the point that it's no wonder marketing ends up subjugated to sales, or even I've seen the CFO running marketing.
I think it's really important, especially for new marketing leaders, establishing the ground rules even before you get in the job that the marketing function has this strategic role to shape the future of the company, I think is an important expectation to set even before you take the job.
You have to think like an investor to some degree, and investors eventually will look at your leadership team.
They will eventually look at your product, and if it's differentiated, and what your competitive mode is.
But the first question that they ask themselves is, "Is this a good category? Is this a good market? Do we believe that this is a market and a category that people are going to spend on?"
And then say, "Okay, does this have problem-market fit?"
And so starting to think like that, it's like, wow, because you just mentioned the "short-order cook syndrome" that we need an e-book or this or that.
Well, the reality is if you're pointing the e-book, or the webinar or the blog, or the field, whatever it is, if it's pointed at a good market, the right market, and you have problem-market fit, and you can identify that it doesn't matter--It makes it really hard to screw up.
It doesn't matter if you write an ebook, or a blog, or you do a webinar, at least you're pointed in the right direction. That just has to be, I think, the North star for the CMO.
And you don't do it in a vacuum, of course, you've got to work cross-functionally.
When I was guest teaching a marketing class at Northwestern, all these bright-eyed and bushy-tailed marketers said, "Well, we're going to go out and interview, what should we ask?"
And I said, "You ask everybody you interview with, if they know their ideal customer profile and ask them to describe it. If you can't get a straight answer, run! Because you just won't be successful."
So, already we have a few insights that I think are worth recapping here. One is taking the verb out of the job title, and that seems like it's a wave of the hand, but it's more like prestidigitation.
I think it's a magic trick to get the senior leadership team that you would become part of to recognize the three or four main functions of the CMO and the marketing group.
And then all the way down to if you're going to approach a firm, maybe if you're going to be the marketing leader, not having solid ICP information is really good. That would be a good opportunity. A thing to fix.
That would definitely be a thing to fix.
I would say, though, when I look at CMOs who survive and thrive, there are a lot of factors, but the CEO is obviously a huge one. And so, I think when you're interviewing press for red flags.
I had a CMO who was interviewing and she said, "Well, the CEO kept saying that he just wants demand gen."
And I said, "Yeah, of course, I'll get him leads and we'll do demand gen."
But I said, "Don't you think we need to understand our strategy and our market?"
And he said, "Yeah, but it's a chicken and an egg thing."
“But it's not a chicken and an egg thing!
It's not like, "Oh yeah, we'll get to that when we get to it."
If you don't have that first, you will never be able to set up a successful, highly-functioning, efficient, go-to market engine.
You can go and create a lot of bogus leads. Any monkey can do that.
But if you want me to help you double at an industry-leading CAC, then we're going to need to understand the market.
I think that's a great segue (and also the first time monkeys been mentioned in the context of marketing and the podcast.)
But I think we should talk about the case against the form-fill MQLs. It's almost calling BS on the whole inbound movement, in a way.
And let's try and dig in on the case against the form fill and these what I really have come to believe our bogus measures for marketing leaders.
Can you talk to us a little bit about that?
I feel there are so many issues with an MQL and there's always the "it depends," and "Can you do it right? And "Can it be a good metric?"
However, the issues are (and I'll take them one by one) first, is the MQL focused on a lead or a contact?
A lead by definition is a contact--one contact.
And we know, depending on whose research you look at, it's anywhere from seven to 15 people on a typical B2B buying team.
If you're selling super, highly transactional thing, maybe that doesn't apply.
But if you are in B2B where you do have a buying team, just getting a lead or a contact could be an indication of a purchase, but it could also NOT be an indication of a purchase at all.
And I think what it does is it sets sales up to fail.
When you go back and inspect deals, you will find that when you win a deal, it's probably because you multi-threaded.
You had multiple "leads" engaged.
When you lost a deal, you probably were single-threaded, you had one lead or contact engaged.
And what happens is the farther along through the cycle you get, the harder it is to multi-thread because people attach to you and want to almost box you out.
The easiest time to multi-thread is super early.
If marketing is just measuring themselves on one lead or contact and throwing it over the wall, they're setting sales up to fail.
You really have to be thinking about, "How do I qualify accounts, and how do I make sure that from the very get go marketing's job is to multi-thread the account?"
So should we rename these form-fillers something besides an MQL?
Because that's what everybody wants to do. They want to be able to say, "Hey, I generated 224 MQLs with blah, blah, revenue potential."
If you want to continue to call it a marketing-qualified lead, that's fine, but it may not be an indication of purchase.
And I think the goals need to not be focused on an MQL.
It needs to be focused on qualifying an overall account, and there needs to be a clear definition of working account and working an account involving working at least two to three key personas.
So, for us, the right one contact showing interest could be an indicator depending on the type of that they're doing, but that has to trigger broader outreach beyond just that lead contact.
You have to set up a process that multi-threads an account.
What too often will happen is marketing passes the lead--it has the email--sales reaches out to just that, and then, again, you've set yourself up for single-threading.
Another big problem is a lot of times the enemy is manual scoring, because it's like auditing yourself. Marketing sets up a point system to deem this many points, that many minutes—this, that, or the other, and all of a sudden that leads to something being qualified.
There's this fakery around trying to make it science.
And those points can be anything I want it to be.
So if I need more MQLs, I can say, "Okay, I'm going to deem G2 research an MQL." I can shove whatever I want in there.
And, to me, that's a problem. I'm really big on using AI that can be back-tested to say, "No, statistically, we know that these personas, these type of accounts, this level of research, this recency and frequency of engagement, this is what deems an account qualified for sales to work."
It's just math. And so we use predictive analytics to be able to do that, which sets us free from a lot of the nonsense.
My third big issue is ideally there's some level of sophistication, and marketing is at least applying some sort of fit model.
It's funny, we have two or three salespeople that have come to 6sense from marketing automation world where everything was inbound and marketing said, "Oh 90% of their revenue is inbound, or the Kings and Queens of inbound."
And they said, I had to do all my own outbound prospecting, because the stuff that came inbound was either a totally bogus company or an intern or a student.
Again, you want to make sure that you're qualifying for fit for the account, but also the persona fit to make sure that it's actually legitimately a positive signal.
And then we, again, look at, from a predictive perspective, we look at recency, frequency, and then timing to be able to statistically prove this account's a good fit.
This persona's a good fit. What they're doing is a positive indicator. And we know exactly where they are in their journey, which allows us to start to dictate the right action to take across sales and marketing.
Then the last problem (and the easiest way to gather MQLs) is to put up a bunch of forms on your content.
Again, we've set ourselves up to measure these bogus MQLs--so we're so excited that we got all these emails. We collected all these emails from all these people, so now we can go and email them and nurture them.
But if you take two steps back and you think about yourself as a consumer and you think about ultimately, again, if you're a Chief Market Officer, what are you trying to do?
You're trying to help people understand.
You want people to learn from you.
You want to create a category.
You want to create a movement.
You want to help people get multiple personas on the buying team engaged.
These are all Chief Market Officer behavior type things, and putting that form up, literally limits doing all of that, which, to me, makes no sense.
I want to be able to do my research and say, "Yes, I looked at all these different solutions, here's why. Here's the differentiation with this blah, blah, blah, blah, blah."
We prevent that [by gating content], which, to me, is just absolutely ridiculous.
I think not only do we prevent it, but then we create click-bait. Because now the optimization is on the form fill, not on the value transfer. It's just an unholy bit of business the more you dig into it.
It creates all of these byproducts that are not positive.
Typically, when you peg your function and your value around MQLs, it's hard to get away from those byproducts in the long run.
And I don't think that [it positions marketing] for the value that we actually can deliver.
So it creates resistance to consuming the content too. And you guys talk about the "dark funnel," which sounds really ominous.
Could you just talk a little about what you guys mean by a "dark funnel" and how that impacts decision making at 6sense and how you advise your clients?
I think that we all know inherently that buyers are going to go out and do a ton of research.
Few will fill out the form, but most won't. And we also know that it's not just one persona, which I talked about earlier, it's multiple.
We also know that over time, because everyone's doing content-marketing, everyone's doing digital advertising, everyone's got an outbound motion.
Our buyers are bombarded.
So, the combination of all those things, a lot of anonymous research, across a ton of members of the buying committee and needing more and more content, and more and more touches to draw them out, creates a growing dark funnel, which is where all this great activity is happening, where buyers are in-market for what you do.
Ideal customers for you to sell to are in market for what you do, and you have no idea.
And we've all experienced where we’re asking, "How did our competitor close that deal? We didn't even get invited. We didn't even have a seat at that table. How is this competitor getting all these deals that we never even saw?"
So, the dark funnel is all the ideal customers that are looking for a solution, just like yours, are potentially buying solutions, just like yours, and you cannot reach them.
You're not getting them to your website, you're not seeing their patterns, you're not engaging with that buying team.
You're never going to eradicate your entire dark funnel, but the more and more you shine a light on that, the more it changes your paradigm.
That changes from waiting for someone to find you and fill out a form, to being able to take control of predictive ability and revenue generation.
So, I think it's a much more controllable, sustainable approach than click-bait forms, because to some degree that's casting a big net and waiting for things to land in your net, versus going out and saying, "That is my ideal fish."
That's the shift that we see happening when you have the right technology that allows you to uncover your dark funnel and then proactively go after demand.
And we've been trying--we've all got a CRM, all got a marketing-automation solution, but if you ask any sales or marketing professional if they have confidence in their CRM or map data, only 13% have confidence.
It gets old fast, and so what you want is this radar that's always out.
We call it 6 Signal, which is a key product of ours that's always out looking for accounts and contacts that are in market for what you do.
The implication here is that if we want people to consume our content, consider us, and believe us a potentially good fit for their business requirements, we need to make it as friction-free as possible to do just that.
We have to make content consumption as easy as possible and only gate the bare necessities. Like, "I'd like a demo" or "I want to attend an event."
And what I'm working on now is really thinking through and clarifying the role of a marketing leader. I've come to three big buckets, one is market.
The second is experience. And because I think that brand, ultimately, is experience.
You can have amazing brand values. You can have amazing vision. You can invest a lot in telling people what your brand means, but, ultimately, your brand is going to be how people experience your company.
Every single second of every day, people are having interactions with your company. There's all these little moments, and they're either positive or negative. And so I think about my role as a big part of CMO is "How do I make the experience amazing?"
And you use the word frictionless--I love that. Frictionless, relevant, engaging, across every encounter with us, needs to represent something and is an opportunity to either create brand equity or detract. And that's another reason why I really struggle with gating content, because I just think it's a poor experience. And then...
Experience really matters in the decision making. It's risen in importance in recent years.
Exactly, especially in B2B.
And then the last pillar is around optimizing revenue. That's coming back to the MQL pitfalls.
Too often I hear CMOs complaining that they're generating all this demand and it's just not closing, and they can't go close deals, so it's not their problem. And to me, it is their problem.
We have to be maniacally focused on predictable pipeline, the sales velocity formula, and then net retentions. Those are the economics of the SaaS-based business, and things like a frictionless experience, things like content, things like product marketing are absolutely critical for win rate and to conversions.
And so it's a little bit surprising to me that CMOs don't feel like that's in their purview to enable an impact.
My number one priority last year was to increase our win rates by 50%.
Now I didn't do it alone, I did it with the sales-enablement team, I did it with our CRO, I did it with customer success.
I think of the three pillars of being a great CMO as market, brand/experience, and then optimizing revenue.
Excellent. Let's dig in a little bit on if I'm going to give up my form fills and my MQLs, I'm letting go of my Teddy bear. How do I get to that buyer intent? And how do we start to use that?
Intent data is the new form of ABM that gets thrown out a lot, and I'm just going to walk through how I think about intent.
The first category of intent is what I call "first party engagement." This means they're on your website, they're chatting with your chat bot, they're consuming your content, they're maybe going to your webinars. And so they're engaging with your brand and on your first party properties.
Now some of this is anonymous, and so you want to be able to de-anonymize first party intent. So whether they fill out a form or not, you still know that they were on your website and the content they consumed.
Then, second category--think about a website that you control, but it's not your website, like G2. So there is a site on G2 all about 6sense that we've provided the content for, we've explained ourselves, but we don't run that site.
So I want to know if someone's researching all about 6sense, that seems like something I would want to know, and be able to understand. And there's a bunch of different kind of review-type sites like that out there.
Third party intent data is, they're more broadly on B2B-type websites, influencer websites, and they're consuming content about you and about your competitors—about things that would indicate that they have a problem.
In an ideal world, you want to be able to have all of those sources of intent.
And then what you want to be able to do is have a tech stack that is smart enough to decode and see patterns to basically tell you what that intent means.
And is that where 6sense comes in?
First of all, when it comes to first party engagement, the Six Signal product that I alluded to earlier basically can help you understand first party engagement better than anybody else in the market.
We have a very high match rate, which is the ability to match essentially a signal to an account.
So you don't need the form, because you know this is the account, this is what they were consuming.
The other thing we do is we bring in signals from like a G2 or a trust radius and allow you to see that and use that in your program, so you have that 360-degree view.
And then the last thing we do is we have our own proprietary and third-party intent network. So we provide intent data, but we also partner with a company called Bombora, which is another great source of intent.
So our goal at 6sense is to, A: provide great data, but B: partner with other data providers to make sure that you have the most robust coverage of your dark funnel.
Again, you're never going to be able to uncover every single part of it, but the more we can bring to our clients to help them uncover the dark funnel the better, and then make sense of it.
The making sense of it is critical.
Just because you have tons of data doesn't mean you know what to do with it and so that's where we apply predictive analytics and AI to be able to help you understand, "Oh, this is what this means. This means I should fire off ads to this account because that's where they are in their journey. Oh wow. This account is super-hot. We need to call all the key personas on a buying team for this other account."
I used to call ABM "Wishlist marketing."
So this sounds like we can get rid of hope and wish and actually find people that are in market and really fine tune our approach to the marketplace.
Exactly. We're trying to get rid of hope and wish.
So we have a marketing leader, we have a Chief Market Officer, but tell me what the likely objections are that the CMO is going to run into in terms of giving up the MQL, really looking at intent as the way to drive the relationship between marketing and sales.
So I think the first challenge is you have to help people understand that less is more because, again, back to the original thing about MQLs. I can gather hundreds of thousands of MQLs and pass them over, and sometimes that feels really good.
The first challenge is helping people understand that we might actually have less "leads," but they're going to be higher quality.
And that's a hurdle that you must get over.
What I encourage people to do is a cohort analysis, and so basically take qualified accounts versus typical leads and then show ASPs, win rates, and cycle times between the two.
We’ve done this by looking at 500 quarters of data, and what we found is every single time it that it's astronomically better when you're working a qualified account, in terms of two times better ASPs, 20% better cycle times, and anywhere from 10 to 20% better conversions.
And so when you start to look at the overall go-to market plan, we've booked $50 million of business in this quarter. Okay, let's work backwards. And we all know how to do the work-backwards plan.
When you start to do that work-backwards plan and you start to ask, "When we increase ASPs and cycle times when we increase win rates, even by fractional amounts, the overall results on the business is tremendous."
I often ask people, "The most efficient way to double revenue?" Answer "A", double leads, answer "B" increased ASPs, win rates, and cycle time. The correct answer is "B."
Also say hire more sales people.
Yeah, and that's expensive.
As marketers, we need to think about sales as our most expensive channel, most precious channel.
Effective. But how can we optimize their time?
You wouldn't send a direct-mail package with a bottle of Dom Pérignon to every single potential client, would you?
You would never have a budget to do that. You got to think about the sales team as a Dom Pérignon, and how are you optimizing their time?
That's a really, important concept.
And if you sit down with the head of sales and start to talk through it, they get it.
Together, you can even do things like optimizing territories and our target account lists so that everybody has a great chance of hitting their number.
That's a big one right there.
The second hurdle is really around, and I talked about this earlier, multi-threading.
If I'm used to getting past someone's email and I just go "email" the hell out of them and call it a lead worked, and I come in and I say, "Oh no, no, no," that's going to take some major change management to say, "Now I'm going to pass you an account, and I'm going to fill out the account with four people that you've got to call, and you also have to do social touches.
You got to get meetings with all of these different various stakeholders."
And then the third one is probably more just what's on your dashboard.
Adjusting your dashboard and your vernacular to be talking about predictable pipeline, and pipeline quotas, and conversions, and ASPs versus just leads. So just updating your metrics accordingly.
So is there an implication on my tech stack as a marketer here?
Yeah, of course. That's why 6sense is, I think, doing so well.
There's a pretty significant impact on the tech stack, and, actually, what's interesting is we just went through our series D very successfully because what we're seeing is a bunch of pretty innovative technology coming out that addresses the revenue team, not sales, not marketing, but overall rev tech, which is great.
There's a lot of innovative new platforms that are addressing all the challenges I just talked about, but that technology needs a foundational platform.
And that's really where 6sense comes in.
You need a ton of data, and that data, today, is in a lot of silos.
Step one is to bring all that data together in a unified format so you have a consistent view of accounts and contacts.
Step two, once you've gotten your data out of silos, you as a revenue team have unified data, but what does any of it mean?
And that's where the predictions and the AI comes in to be able to really give you account fit and persona fit.
Are you doing the right level of activity to break through to this account?
All kinds of different predictive models then get applied for sales, marketing, and customer success to really optimize performance.
And then part three is: great that you have a chat bot, great that you have a sales engagement platform, great that you have a direct gifting platform.
You've got all these different execution channels, well they're in silos too.
So the next thing that we do, the last part, is bringing the decisioning together and being able to trigger orchestration and have deep integrations to things like chat, direct mail, sales engagement, marketing automation, so that it's a foundation of your rev tech stack you have data insights and decisioning to orchestrate all the channels.
Sales, marketing, and customer success are much more unified because you got one system of record for insights, orchestration, and decisioning.
That's awesome. My experience doing this for quite some time is that marketing people often, to me, look like eight year olds playing soccer, everybody runs to the ball. I think we can say, with good assurance, that a lot of people are going to be running toward intent data and predictive AI.
Is this going to devalue this way of doing business?
You mean because everyone will do it and it won't be differentiated?
Yeah. If everybody's using intent data, does it devalue the whole idea or does it serve the buyers because they're going to be hearing from the right people at the right time?
I think what's starting to happen is if you're not using it today, you're at a competitive disadvantage. We're getting to that tipping point.
So, then we all have this "competitive advantage" it becomes, to some degree, back to what great marketing is about.
It's how do you use this competitive advantage to really connect with your audience?
What does your creative look like?
Are you investing in, not click bait, but great content?
Does it potentially level the playing field?
Maybe, but I think we're going to see an up-leveling overall, and, hopefully, people will double-down on that second category of what I described as experience and differentiate that way.
I think that's beautiful place to land on is that you need to do a great job with this new way of understanding the market and the potential customers who are in it.
So, you need to do a great job with this new technology, this new capability to really make it all happen. And it seems like solutions like 6sense allow us to start to do all that.
So, that's very cool.
I want to say thanks so much. Our guest today was Latané Conant of 6sense. Latané, how can people reach you if they'd like to dig in with you?
I'm pretty active on LinkedIn, so feel free to hit me there. Also, always happy to get people copies of the book. So, let me know if you'd like a copy of the book. Also, check out 6sense.com.
That's great. Actually, we have a special link for our listeners to request free copy of the book.
And I highly endorse it. It's a great read.
Thanks for listening to the SaaS Backwards podcast brought to you by Austin Lawrence Group. We are a growth marketing agency that helps SaaS firms reduce churn, accelerate sales, and generate demand. Learn more about us at www.austinlawrence.com. You can email Ken Lempit at firstname.lastname@example.org about any SaaS marketing or customer retention subject. We hope you'll subscribe, and thanks again for listening.